Suit Holds Up CareLine Buyout: A hitch...

Suit Holds Up CareLine Buyout: A hitch may be developing in Toronto-based Laidlaw Inc.’s proposed buyout of CareLine Inc. of Santa Ana.

A shareholder’s lawsuit filed in Delaware state court in July, shortly after the deal was announced, alleges that both companies and individual CareLine directors breached their fiduciary responsibilities to CareLine stockholders by failing to seek other potentially better alternatives, such as putting the company up for auction.

Terms call for the Canadian transportation and waste-management company to pay $180 million in common stock for the Santa Ana ambulance service company. Laidlaw will exchange 1.1 shares of a non-voting stock for each share of CareLine common stock.

Among other allegations, the shareholder, Joshua Teitelbaum, claims that the merger will leave CareLine shareholders in a worse position because they’ll lack voting rights in Laidlaw. The suit seeks both a halt to the merger and unspecified damages.

Lawyers for both companies deny the charges. A date for CareLine shareholders to meet and vote on the proposal hasn’t been set.